Category Archives: Conflict of interest

Major banks and credit insurers are calling on the government to ‘step in’, as Carillion’s debts soar and ‘huge write-downs’ are announced on the value of several old contracts.

Some – according to the Financial Times – are seeking a taxpayer guarantee for the company’s debt and assurances that Carillion will be allowed to compete for future contracts, despite the company’s troubled state. Oliver Dowden, newly promoted to the frontbench, says that the government is making contingency plans for Carillion folding.

If Carillion goes under, writes MP Jon Trickett, “We would effectively be paying for these services twice. This government has socialised the risk but privatised years’ worth of profit for shareholders . . . it is allowing firms with public contracts to pay millions to private shareholders as the public suffers from cuts to disability benefits, schools and the NHS”. He adds:

“They are in debt to the tune of £1.5bn, while being valued at less than £100m and are being investigated by the Financial Conduct Authority over financial statements issued in the run-up to July’s profit warning . . .and if they fold, Britain could face a huge bailout so that our schools, hospitals and train lines keep running”.

Will the 99% bail Carillion out?

The government now relies on this contractor for a wide range of services. The Financial Times lists Carillion’s major contracts in the transport, defence/security and health sectors and points out that Labour’s Shadow Business Secretary has asked why ministers continued to sign off major contracts with the company even after it issued a profit warning in July 2017.

Theresa May’s new Cabinet ministers have – nevertheless – confirmed that they still intend to continue with the privatisation and outsourcing of public services to private firms which then make a profit at the expense of the taxpayer.

Some politicians and party members have, through directorships, shareholdings or the employment of family and friends, a vested interest in these companies, many of which donate to Conservative party funds, hoping to ensure another Conservative government.

MP Jon Trickett, shadow minister for the cabinet office, whose principled political life is outlined here, presents the view of ‘Corbyn Labour’, that taxpayer-funded services should be conducted in an ethos of public service rather than for private advantage: “Whether that’s to run welfare payments to those receiving universal credit, running hospitals or administrating schools in huge academy chains . . . “

He points out that when these firms cannot make good on their obligations under these contracts the British public picks up the bill, citing the termination of Virgin’s contracts on the East Coast main line.

The MP adds: “I represent a former mining area, which hasn’t seen meaningful private investment in decades, and little public investment since the 2010 election. Some of the poorest people in the country, with some of the worst prospects due to years of Tory government, live there. They have seen private firms make profit out of their benefits, their schools and crisis-stricken NHS services”. He ends by giving an assurance:

“Labour would reverse the presumption in favour of outsourcing and provide more cost-effective services, treating workers better by running many services in-house”.

“Is it a ‘success’ having thousands of elderly, immobile people in care or nursing homes, with Parkinson’s or Alzheimer’s, post-stroke or myocardial infarction; blind from macular degeneration or deaf; incontinent and catheterised, unable to tend or feed themselves but living out some form of existence? I rather doubt it from a quality of life point of view, not to mention the strain it places on health and social care resources”.

Bronwen Maddox, director of the Institute for Government and formerly an investment analyst in the City and on Wall Street, focusses on the argument that ‘we’ are about to see “the end of inheritance”, stating that the assets of the British middle-class will have to be spent on their own care in their later years.

Ms Maddox adds that some MPs are suggesting that government try to encourage people to see the equity in their homes as a resource while prompting the financial services industry to develop cheaper, more flexible products for extracting it.

Some readers commented:

My life. My choice.

Right to die, please.

Those concerned about care costs eating away their inheritances – and who do not wish to be ‘cared’ for – support assisted dying. It’s a win-win solution.

I would like the right to die when I become too incapacitated to lead the life that I want. Hopefully when I get to that stage it will be generally available as it is in some other continental countries.

Emma Duncan, editor of the1843 magazine and former deputy editor of The Economist, wrote today inThe Times: “Seeing my mother spend her final years longing for death has convinced me the law on assisted suicide must change”

“My brave mother, who could meet pretty much any challenge with her head held high, was brought low in the end. As her spirit faded, the one thing that still got her going was the law on assisted suicide. It infuriated her. She could not see why she should be kept alive, unwillingly and at great expense. She asked me several times to put a pillow over her head or take her to Dignitas, but I pointed out that I could be charged with assisting her suicide, and it would be tiresome for my children if I were jailed, so she gave up. But she never stopped complaining about the law, or sending money to Dignity in Dying, in an attempt to get it changed.

“To honour her spirit, I shall be taking up the cause she espoused

“Her case, which she continued to put cogently to the end of her days, was twofold. The first argument was about freedom of choice. Our laws are, by and large, governed by the notion that people should do what they want so long as it doesn’t hurt anybody else. My mother wanted to die, but suicide is impossible for the old and frail, though for a while she tried starving herself to death. Why, so long as she was settled in her mind — something which an application to a judge, with a lapse of time between request and confirmation, could establish — would the state not make it easy for her to do what she wanted to do?

“The second point was about cost. She thought it a horrible waste that hundreds of thousands of pounds were being spent on keeping her alive when they might have funded better education for people starting out on their lives. And it was going to get worse as society aged. “Think of the waste!” she would say. “It’s simply ghastly!”

“When I would point out that changing the law might cause some suffering, of old people bullied into suicide by greedy relatives, for instance, she countered that Switzerland and the Netherlands, with liberal regimes, report no such problems”.

Emma’s mother believed that the balance would shift heavily in favour of a law liberal enough to let even those without terminal diseases end their lives.

Emma ended: “We will be cremating my mother’s body tomorrow, but to honour her spirit I shall take up the cause that she espoused. I believe, as she did, that change will come. And the sooner it comes, the better it will be for brave people who want to take control of their death rather than be vanquished by old age”.

CCGs had to release data on payments from private companies and charities under the Freedom of Information Act. With researchers at Bath University and Lund University in Sweden, the BMJ compared the data to the details published in CCGs’ online registries.

NHS clinical commissioning groups, who are in charge of buying health services for their local areas, received payments, including sponsorships and tickets to sporting events and concerts from the building pharmaceutical and hospitality industries.

The BMJworked with Piotr Ozieranski, a lecturer in the department of social and policy sciences at the University of Bath, Shai Mulinari, a sociology researcher at Lund University in Sweden and Emily Rickard, a research assistant in Bath’s department of social and policy sciences, who intend to publish the full findings of their research in the coming months.. Piotr Ozieranski’s comment: “It seems rather peculiar that CCGs are permitted to accept any payments or benefits in kind from private sector companies”.

Only £1,283,767 of £5,027,818 paid from 2015 to 2017 was declared on public registers

This, despite the revised NHS England guidance which requires CCGs to maintain and publish registers of their conflicts of interest and procurement decisions. This was revised and strengthened after finding, in 2015, that CCGs had paid many millions of taxpayers’ money to companies, hospitals and surgeries in which their members had financial or professional stakes.

National Health Clinical Commissioners responded: “This BMJ investigation seems to imply that there is some wrong doing on the part of CCGs by working with external companies and pharmaceutical organisations, which we would strongly challenge.

Not so: the investigation does not relate to working with these industries, it implies that funding of recreational activities for CCG members, most of which have not been declared as required, is the ‘wrong-doing’.

Paul Glasziou, professor in the Centre for Research in Evidence-Based Practice at Bond University, Gold Coast, Australia, says that doctors are often unaware of the effect of drug companies’ activities on their own behaviour:

“Pharmaceutical company dominance of the funding of continuing medical education can result in prescribing that harms.

“Clinicians are often naive about the persuasion tactics used by some companies. So we urgently need better ‘inoculation’ against these tactics, as well as better regulation and funding of balanced continuing education.”

Since clinical commissioning groups were launched in England in 2013, there have been concerns about the conflicts of interest among those who commission health services while also providing them. But the Association of the British Pharmaceutical Industry said that drug companies had an important role in supporting healthcare organisations.

Campbell Robb, chief executive, said: “With the possibility of eviction with just two months’ notice, and constant worries about when the next rent rise will hit, the current rental market isn’t giving people – particularly families – the stability they need to put down roots. The stable rental contract offers renters a five-year tenancy and gives landlords more confidence in a steady income, all within the existing legal framework”.

Scotland for best practice to date: the Scottish secure tenancy

In Scotland, under Jack McConnell’s Labour government, by an order under section 11 of the 2001 the Housing (Scotland) Act tenants of local authorities, housing associations & tenants who are members of fully mutual co-operative housing associations, from 30 September 2002, became Scottish secure tenants.

Read the excellent termshere. Will a Labour government in this country adopt this Rolls Royce standard model and also introduce a stable rental contract for those in private accommodation? Or will the profit motive win the day?

“It is the next big scandal waiting to happen. It’s an issue that crosses party lines and has tainted our politics for too long, an issue that exposes the far-too-cosy relationship between politics, government, business and money.”

David Cameron, then prime minister, promised that a Conservative government would stop the lobbying industry’s attempts through former ministers to access and influence policy. His attack on “crony capitalism” came in a speech in which he attempted to tackle Britain’s “broken politics”:

“Now we all know that expenses has dominated politics for the last year. But if anyone thinks that cleaning up politics means dealing with this alone and then forgetting about it, they are wrong. Because there is another big issue that we can no longer ignore.

The Conservative leader said that the “£2 billion industry” has a big presence at Westminster and take in some cases MPs are approached more than 100 times a week by lobbyists.”

That this House recalls former Prime Minister David Cameron’s condemnation in 2010 of politicians who are out to serve themselves and not the country by lobbying; notes the abject failure of the Government’s watchdog, the Advisory Committee on Business Appointments, to reduce the abuses of the potentially corrupting revolving door between ministerial office and big business lobbying; and calls on the Government to establish an effective watchdog that would enhance the House’s reputation for probity, removing the opportunities for former Ministers to sell their inside knowledge and contacts for financial advantage by prohibiting their lobbying for companies they influenced or regulated in their Ministerial roles.

As ACOBA, the Government’s ‘watchdog’, has failed to reduce the abuses of the revolving door between ministerial office and big business lobbying, government should establish an effective mechanism which would prevent former Ministers from selling their inside knowledge and contacts for financial gain.

In last week’s Prime Minister’s Question Time there was a fiery intervention byMP Dennis Skinnerwho told Theresa May about research showing that the High Speed 2 rail line was going out of its way to stop disruption to “leafy suburbs of the south”:

“[In] the leafy suburbs of the south, the first 140 miles, 30% of it has been dedicated to tunnelling to avoid knocking houses down.

“Yet in the north we are now told that the percentage is only 2% for the whole of the north. “And why? Because HS2 says it’s too costly, knock the houses down.

“Will she arrange for a meeting with people from my area in order to avoid another 30 houses being knocked down in Newtown part of Bolsover.

“Isn’t it high time that this government stopped treating our people like second class citizens?”

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Theresa May replied by extolling her government’s service to these second class citizens citing resounding names Northern Powerhouse and Midlands Engines; the reality?

Knowsley and Liverpool are two of the most deprived areas of the country: council spend per head in these areas has been reduced by £400 and £390 respectively. In Wokingham and Elmbridge, two of the wealthiest parts of the country, the corresponding totals are £2.29 and £8.14.

A scheme to compensate councils for the council tax freeze, for example, is calculated on the value of properties in the area, meaning that the higher the value of local homes, the larger the relief package: Surrey gets a vastly bigger pay-off than Teesside. (Tom Crewe, LRB essay)

The local authorities with the highest levels of deprivation and more reliant on central government grants, were relatively worse off. Cuts to the poorest metropolitan districts averaged 28% compared with more affluent authorities (2010-2015). National reviews painted a stark picture of closures and restrictions to services. (Steve Schofield, Conservative austerity and the future of local government)

Bronwen Maddox, director of the Sainsbury-fundedInstitute for Government, comments inthe FTthat the physical decay of the Palace of Westminster is more than a metaphor: “Like the culture and conventions inside, the building’s failings contribute to the problems of running a respected 21st-century democracy”.

She adds that the culture is the greater problem, citing Michael Fallon’s conduct and his assertion that his inappropriate advances to women had “fallen below the high standards that we require of the armed forces” – not those of Westminster.

Via Twitter and referendums, many voters are questioning the value of a representative in parliament. The ‘firestorm’, fanned by the fragility of the government and fractures in the main political parties, is driven by MPs’ own impatient fear that something needs fixing if they are to have a chance of countering public contempt, she adds, asking: “What should be done?”

Her answer: Theresa May is right to call for a new independent regulator. The Independent Parliamentary Standards Authority, created in 2010 after the expenses scandal, covers only pay and expenses”.

Public distaste for Westminster has deep roots. The financial crash a decade ago, and the expenses scandal, bear much blame; but voters resent many of the messages that politicians feel obliged to deliver, such as the constraints on spending.

Ms Maddox believes that the strains, risks and sheer career uncertainty of being an MP have rarely been greater. Select committees, whose healthy contribution to the scrutiny of government and legislation is growing, depend on MPs putting in time to master specialist areas. She notes that the problems go deeper than MPs’ behaviour and conditions of work.

Parliament is faltering in its basic job of holding the government to account, passing well thought out legislation, and doing so in a way that commands public trust.

The rifts in the two main parties are so deep that they are barely functioning within Westminster as conventional parties. Brexit has squeezed out almost all other legislation from the timetable. A minority government’s struggles to survive mean that much debate is stalled or simply avoided.

Ms Maddox sees that people are angry, and have got used to saying so.

She thinks that the fury about sexual harassment promises to achieve what those debates failed to — forcing a change in how Westminster runs itself. But she completely ignores the most serious problem in Westminster. Lobbying by affluent corporate interests is influencing the nation’s decision-makers.

MPs and civil servants pass through the revolving door to the corporate world and vice-versa – ensuring that legislation passed generally benefits the financial/industrial/commercial world but not the vast majority of those who elected MPs to serve the common good.

The growing public awareness of this unholy alliance is leading to a rapidly increasing loss of confidence in our institutions of democracy, lower tax revenues, and cuts in healthcare, pensions, education and infrastructure spend.

He cites seven examples, the latest being the refusal of the Financial Conduct Authority (FCA), the UK’s banking regulator, to publish its 361-page report on misconduct at the state-controlled Royal Bank of Scotland (RBS).

The 2013 Tomlinson Reportshowed that instead of rescuing struggling businesses, banks made money by asset-stripping and destroying them. This was followed-up an investigation by the FCA and in November 2016 it published what purported to be a summaryof its full report. Subsequently, the BBC obtained a leaked version of the report. It referred to “inappropriate action” by RBS’s Global Restructuring Group (GRG).

The inappropriate action experienced by 92% of the businesses included complex loans, higher interest rates, and unnecessary fees. Businesses could not easily return to good health.

For the period 2013-2015, GRG handled 16,000 companies – and about 10% survived. Many ended up in administration and liquidation, with their assets were sold cheaply. RBS has set aside around£400 millionto deal with possible claims.

The secret FCA report is not only an indictment of RBS, but also of other banks, accountants and lawyers. People are entitled to see the full scale of the scandal, and remedial legislation cannot be drafted without sight of the whole report. Yet the regulator’s impulse is to shield RBS and its accomplices.

Stephen Latner, an FT reader, reminds columnist Philip Stephens – and a whole range of commentators – that it would be more accurate to describe “populism” as “anti-elitism” and acknowledge that the backlash is not down purely to economic factors but political as well . . .

Philip Stephens had explained that the explanation for a rising sense of grievance and a collapse of trust in the old political order is to be found in the answers to the opinion poll question asking people if they expect a better life for their children:

“Voters are now more likely to answer no than yes. The march to progress, they assume, has ended . . .The pain is made the more acute when a small minority can indeed pass on great power and wealth to their children . . .”

Latner adds that many voted for Brexit because of the perceived elitism of the EU (“an unelected, non-transparent, central bureaucracy”) and sees that new technology – ‘the digital age’ – is ensuring that elitism will come under fire and more centralisation of political power will be seen as elitist and unacceptable.

Stephens supplies the element missing from Latner’s analysis – the added burden of a political elite allied with the wealthiest corporates:

“At its simplest, establishing trust is about behaviour. Today’s elites should ask themselves just when it became acceptable:

for politicians to walk straight from public office into the boardroom;

At the moment, due to imports, this country’s food security ratios are high – see map:

But 28,000 farms in England went out of business (132,400 in 2005 to 104,200 in 2015, DEFRA), many due to farmgate prices below production costs.

Meanwhile the AHDB advisers inflicted on them thrive, advertising for Sector Strategy Directors to be paid £62,000 – £76,000 for working 35hrs per week

The farmer drawing attention to this – who works far longer than 35 hours for far less return – comments “How easy it is to spend someone else’s hard earned income. An independent organisation (independent of both commercial industry and of Government)??”

Independent?

AHDB advisers working half the hours at more than double the average farming income frequently offer sage advice: their mantra: “improve productivity”. The FT quotes reflections by Phil Bicknell, market intelligence director at the AHDB who sees only three options:

The most desirable: securing a free-trade deal with the EU,

The least: putting up protectionist barriers or

opening up trade to low-cost competition from around the world.

Notably absent is any sustained concern about a fair price deal for food producers and the prudence of supplying the home market first before trading any surplus.

The Gosling Report finds that for farmers in Northern Ireland the sale price for the majority of commodities they produce does not even cover the input costs; this applies equally to most other British farmers. Paul Gosling comments:

Farmers in the rest of Britain in the same position should act with those in Northern Ireland. They require legislation similar to that submitted by Fairness for Farmers in Europe (an association of 30 farm organisations in Britain, Ireland and the EU) to the 2010/11 CAP review. This would state that farmers must be paid a minimum of the cost of production plus a margin inflation linked for their produce; if the ‘free’ market moves up the farmer will get the benefit, however, when it falls the legislation is there to provide the safety net limit of drop.

AHDB please note: as a matter of urgency with Brexit negotiations under way, all farm groups could campaign for legislation on just farmgate prices, stating that a minimum of the cost of production plus a margin inflation linked must be paid at the farmgate for all food produced in Britain.

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Readers wishing to know more about NI Farms Groups’ campaign should contact: